"CFPB's Richard Cordray wants to replace arbitration with a broken class-action system"

Institute for Legal Reform President Lisa A. Rickard penned an op-ed this morning in the Washington Examiner, calling for passage of the Fairness in Class Action Litigation Act (FICALA) after the…

BRUSSELS — A new, six-nation survey of European Union consumers finds overwhelming support for including consumer safeguards in any new collective action lawsuit system. Furthermore, 69 percent say that they would only support advancement of new collective action lawsuits with safeguards in place.

The findings are part of a survey released today in Brussels by the U.S. Chamber Institute for Legal Reform (ILR) and conducted by WorldThinks, a global public opinion research firm.

The survey was conducted in six EU member nations – the UK, the Netherlands, Spain, France, Germany and Poland. Each national survey included roughly 1,000 adult consumers, with a +/- 3.05 margin of error for all nations except for the UK, which has a +/- 3.07 margin of error.

The survey’s findings come as the EU Commission is anticipated to lay out the next steps in the process of determining whether to require member nations to create a collective action lawsuit system, also known as class action lawsuits. A directive from the Commission could come as early as this fall and is expected to be the blueprint for how each nation must structure its civil legal system to incorporate these new types of lawsuits.

Lisa A. Rickard, president of ILR, said the findings underscore support for the Commission to ensure safeguards protect consumers and businesses from the excesses of the trial lawyers that would be filing these types of cases.

“Europe must learn from the mistakes of the United States when it comes to class action lawsuits, and not duplicate a system like ours that rewards lawyers and robs from the consumers on whose behalf they are suing,” she said. “Without protections, class action lawsuits will be harmful to consumers as well as businesses.”

About 75 percent of EU consumers expressed support for specific safeguards that:

  • Require cases to meet threshold criteria before a judge will allow it to go forward
  • Ensure consumers “opt in” to these cases rather than allow lawyers to include consumers in lawsuits without their knowledge
  • Direct that only consumer groups initiate cases, rather than trial lawyers
  • Obligate parties in the dispute to demonstrate they have tried other means to resolve the problem before bringing a lawsuit

The study also examined attitudes about safeguards for third party litigation funding, or TPLF – which is the practice of independent financial firms investing in lawsuits such as class or collective action cases in return for a portion of the lawsuit proceeds. The study found 81 percent of consumers support safeguards against the excesses of the TPLF industry.

These include requiring funders to be licensed and to publicly disclose funding in cases; requiring funders to remain in cases through completion, as opposed to withdrawing funding in the middle of the legal process; and, ensuring that the consumers’ lawyers, not the funders, are in control of the legal decisions and strategy in cases.

Ben Shimshon, founding partner of WorldThinks and lead researcher for the study, said: “This landmark study shows clear consumer support for safeguards as collective action is adopted across the EU. In particular, our research found deep concern around the advent of Third Party Litigation Funding and a strong desire for action to ensure that the focus of litigation remains the delivery of consumer benefit, rather than benefit to funders.”

A full link to the study can be found here.

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the global, national, state, and local levels.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.